If you're pondering a startup, go for big data. This VC might fund you

CEO interview blog Enterprise software venture capital firm Atlantic Capital Partners backs a number of up-and-coming startups, including Amplidata, Racktivity and Torch, the firm behind data analytics tool Graylog2. But what makes the firm's partners decide which firms to take a gamble on?

ACP was founded in 2010 and invests, at the growth stage, in enterprise software and digital life domain startups. Currently it has three general partners: Fred van den Bosch, Dr. Marcus Englert and Moshe Bar, along with two venture partners: Raffaele Jerusalmi and Lars Dittrich.

Moshe Bar is a well-known figure in the IT landscape. The list of companies he co-founded is substantial and includes Qlusters, XenSource, Hyper9 and Qumranet. Moshe is now a partner at Atlantic Capital Partners and serves on several boards.

I know Moshe through his time at Qumranet and quizzed him to find out more about Atlantic Capital Partners and his current investment focus.

Willem ter Harmsel: What is your prime focus at ACP?

Moshe Bar: We basically focus on two things: digital lifestyle and enterprise software. My partner Dr. Marcus Englert focuses more on the Digital Lifestyle portfolio, and I am on the enterprise software side, where we recently have done a quite a few SaaS and cloud investments.

In the digital lifestyle portfolio we have companies like MiFlora, which is a German online flower e-commerce service, delivering flowers throughout Europe in under 24 hours. We also have some music and media content streaming services like Tape.TV, where I happen to be a board member, along with my partner Dr. Marcus Englert.

In the enterprise software corner we have several investments like GreenSQL, which is a database security solution that competes with the likes of Imperva, IBM and Oracle.

The market for security is red hot right now. Customers do not have to be told these days why they need security solutions.

A company that we recently invested in is Torch, which develops Graylog2. I have advised Splunk before, and with Torch we decided to set up a similar proposition but offering an open-source solution which scales better and costs much less than Splunk’s products. Big data is really interesting to me, and Torch is going great.

Willem ter Harmsel: Are you aware of Cloud Physics, and are they in the same area as Torch?

Moshe Bar: I am aware of them and they are in a similar area, though I believe they are geared toward a different solution and use case.

There is a lot of action in big data and it's definitely something we keep a close focus on.

Willem ter Harmsel: Having sold XenSource to Citrix, how do you see the hypervisor market developing now?

Moshe Bar: Well, the market is basically divided between Microsoft and VMware and it will be interesting to see how this space develops further. Microsoft was never really focused on the hypervisor; they used it more as a pricing-support strategy than anything else. VMware has been very focused on virtualization and it is hard to see other hypervisors coming up strong in the field.

I believe, as an investor, it is not a very interesting market right now. The relative gains of starting a new general hypervisor new are marginal and it’s not going to be as easy to get a start-up financed in this space as it used to be in the past.

Willem ter Harmsel: What are your views on the storage market?

Moshe Bar: There are many very interesting developments. One that I don’t think hasn’t developed much in the past ten years are the file systems. We are essentially still using file system technology from 15-25 years ago.

The way we use data now puts strain on the current file system technology. There is mobile technology, streaming protocols with very complex and dynamic networks. Then there is flash technology that has come on so strongly, the current file systems are completely not designed for this era. On the other hand, speaking from experience, developing new file systems is a hard and not very rewarding (financially, that is) job.

Willem ter Harmsel: Where would you like to invest in over the coming year?

Moshe Bar: It would probably be in cloud applications, which is perhaps bit of a crowded area, but very interesting.

Willem ter Harmsel: How do you judge whether to invest in a business or not?

Moshe Bar: What I firmly believe in is that one should look at three things; The team, the space in which the business operates and how innovative the idea is.

In terms of how much importance I attribute to these ideas, I’d say that 70% of the decision making is based on the quality of the team, 20% on the space that the company is in, and 10% is based on the innovation, invention etc.

If you have a poor team, that you would provide with teleportation technology to travel back in time, then they would still mess up ideas that have been proven to work.

It is all about the execution, not the idea itself. We look at the team as the most important factor. Are they hungry; are they young, do they execute fast; do they take big risks? These factors are of vital importance to the success of a company.

Willem ter Harmsel: What is your most important personal goal with ACP, what do you enjoy achieving?

Moshe Bar: I just love to meet great entrepreneurs, young people with bright minds. We get to make heroes out of them. That is a great feeling. Of course on the other side, we have to make our investors happy – but these things have aligned very well at ACP. ®